Why RBI is reluctant to cut interest rates despite cooling inflation
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Shaktikanta Das, RBI governor.
Synopsis
While the core inflation is at 12-year low of 3%, the repo rate is still at 8-year high of 6.5%. As consumption growth lags and GDP rise in FY25 is estimated lower than last year, is it time for RBI to take the road less travelled?
In 1915, poet Robert Frost wrote about two roads diverging in a yellow wood and him not being able to travel both. A century and a decade later, a “Frost” inflection moment has arrived, riding on the tides of monetary policy, the Reserve Bank of India (RBI) wrote in its latest (June 19) State of the Economy report. The central bank is rarely poetic. But there are times when it is at such a crossroads that going beyond the mundane is helpful.
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